One of the first groups to bring a lawsuit alleging Blue Cross Blue Shield of Michigan improperly charged hundreds of Michigan self-insured employers to help subsidize insurance coverage for senior citizens made a quiet exit just after its eighth anniversary in court.

The trustees of the Pipefitters Local 636 Insurance Fund will be reimbursed $284,970.84 in collected “other than group” fees that Blue Cross charged the fund from 2002 to 2004 plus $106,960.78 in interest, U.S. District Judge Arthur Tarnow ruled earlier this month.

At issue in this lawsuit was one of various fees in administrative services contracts that Blues Cross enters into with self-insured employers, allowing them to make use of its network.

The Detroit judge originally certified a class action on behalf of 550 to 875 self-insured businesses, retirement funds, nonprofits and other customers who use the Blues network of physicians and treatment centers.

But the 6th U.S. Circuit Court of Appeals in Cincinnati decertified that class last year, finding that the lower court did not adequately review whether the Blues was a fiduciary that managed fund assets for every single member of that class.

Then the U.S. Supreme Court earlier this year refused to review that decision, meaning no class action exists. Tarnow in May also denied a request by Pipefitters’ attorneys at Southfield-based Sullivan, Ward, Asher & Patton PC to allow the Sheet Metal Workers Local Union No. 80 and the trustees of the Michigan Regional Council of Carpenters Employee Benefit Fund to intervene.

In other words, Pipefitters and their attorneys can collect for the insurance fund’s own damages only, rather than the possible eight- or nine-figure sum that would cover a class of affected self-insured employers.

The Blues and Pipefitters also disputed the rate and amount of interest that could be added, but the judge mainly adopted the plaintiffs’ calculation of interest — for a total judgment of $391,931.62.

In other Blues-related lawsuits

In a related group of lawsuits, fellow U.S. District Judge Victoria Roberts also ruled earlier this month that Blue Cross was a fiduciary of the employee benefit plans of Hi-Lex Controls Inc. in Rochester Hills and Borroughs Corp. in Kalamazoo.

Roberts granted Blue Cross’ request to dismiss seven out of nine claims brought in two lawsuits by those companies and their health plans. But she also granted summary judgment in the two companies’ favor on a separate claim, alleging that the Blues engaged in self-dealing from the company funds’ assets in violation of the federal Employee Retirement Income Security Act.

The two companies are among 10 self-insureds who brought separate lawsuits last year alleging ERISA violations, through Grand Rapids-based Varnum LLP at U.S. District Court in Detroit. At issue in those cases are the other-than-group fee and two others, a “plan-wide viability surcharge” and a group retiree surcharge.

In the 1990s Blue Cross began merging those fees with hospital claims on billing statements to self-insureds, according to Roberts’ order, so that the fees were not visible to the companies.

“It is undisputed that Blue Cross determined its own administrative fee and collected it from plan assets. Plaintiffs need establish nothing more to prove a violation of (ERISA). The existence or non-existence of Blue Cross standard operating procedures for calculating the disputed fees — which remains in dispute — does not create an issue of material fact. Whether Blue Cross calculated its fee according to a set methodology or pulled numbers out of the sky, it still unilaterally dealt with plan assets for its own benefit.”

The judge also left one count of breach of ERISA fiduciary duty intact, for now, because there was not enough evidence to support Blue Cross’ argument that it was barred by a statute of limitations. In other words, a judge or jury hearing the case will have to resolve the facts on one claim, and the issue of damages only on another.

Helen Stojic, director of corporate communications at Blue Cross, did not immediately return a phone call seeking comment on the two rulings.

Aaron Phelps, partner in commercial litigation at Varnum and co-counsel for the 10 plaintiff companies suing the Blues, said their claims combined could total more than $15 million -- which is to say nothing of fee claims the firm has already resolved with Blue Cross out of court for four other self-insured employers.

The other lawsuits await a conference date on Oct. 22, he said, and attorneys are working on a way to apply the ruling in Hi-Lex and Burroughs to the other eight pending lawsuits.

"The Pipefitters decision didn't necessarily affect us, because our clients don't have to (participate in the proposed class)," Phelps said. "And we have some similar, but also some different claims.

"The self-dealing count that judge Roberts ruled on a few weeks ago, was not a factor in the Pipefitters case."